1. Assume that we have a sample of 100 observations for two variables 2 and 22, with = 1 and T2 = 2. Besides, we have riz = 150, 2 = 550 and 2 = 260, where and are the vectors of 100 x 1. With this sample we have the two-equation system: Ili = + 11 T2i = l + 2i+ Please: (a) Compute the OLS estimator of , and estimate its sampling variance. (b) Compute the FGLS estimator of , and its sampling variance. (c) Compare your results in the first two parts of the question. 2. Suppose an analyst has a system of two equations: yli = 3121 + Eli y2i = 32x21 +33x3i + 2i, (1) (2) (3) where the variances and covariance of the errors 1 and 2, are known. The analyst applies the GLS to the system, but mistakenly omits 23 from Equation (4). Please state the consequence of the mis-specification of the model regarding the consistency of the estimator of 3.